Rehabilitation of a house from start to finishStep one: meet with the contractor and define the work. Step two: Define the work and purchase materials. As a wholesaler transitioning to rehabilitation, there's something I've always wanted to know. Do you follow a certain order during the rehabilitation process? For example, you do a demonstration on day 1, then day 2 is cleaning, day 3 is drywall, etc.
I know that the first thing would be the demonstration and the last would be landscaping, but what order do you follow? Jeff has more than 25 years of experience in all segments of the real estate industry, including investment, brokerage, residential, commercial and property management. While his real estate business is running on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.
Rehabilitating a homerequires time, working capital and experience; it's not something you want to do directly if you're not ready. In addition to low- and medium-cost work, a high-cost rehabilitation includes the cost of repairing structural elements, such as the roof, the foundation, or problems with the sewer line that connects the house to city services.
The weeks before closing are the best time to prepare to rehabilitate the property, and there's a lot to do. This includes utility costs, property taxes, and general maintenance during the rehabilitation and sale process. On the other hand, a repair program generally focuses on aesthetic changes that can be made quickly or at a lower cost than full rehabilitation. Always check with your contractor and the city government to ensure that you comply with property rehabilitation regulations.
The rehabilitation of a home can be done by an investor with the hope of making a short-term profit or by the owner of a rental property with a longer-term investment horizon. To start rehabilitating homes, investors must first research their market area, evaluate their funding options, and form a team to work with. Good ways to find a contractor include asking personal recommendations from an investor-friendly real estate agent or driving around neighborhoods looking for people working on current rehabilitation projects. The key to having more money in your pocket is to take the time to plan your work and do everything you can ahead of time, since even small rehabilitation jobs can take a long time if not properly planned.
It's a matter of debate whether cabinets should be placed before the floor or vice versa, and it depends on your specific needs and rehabilitation style, and on the desire to reduce costs. In addition to keeping the interior of the house safe, houses that are being rehabilitated often attract the attention of neighbors and of potential buyers and tenants who pass by. That's right, if possible, start preparing for rehabilitation before closing, not on the closing day. For a major rehabilitation project, many investors hire a general contractor who, in turn, hires subcontractors and maintenance staff to work on specific parts of the rehabilitation.
Rehabilitation requires attention to detail and a lot of time to master, but it's still one of the most lucrative real estate investment options. A good rule of thumb is that if someone can live on the property during renovations, it's most likely a repair home and not a full rehabilitation.